AFRICAN DEVELOPMENT BANK GROUP

MOZAMBIQUE

NATIONAL RURAL WATER SUPPLY AND SANITATION PROGRAM (PRONASAR) IN NAMPULA AND ZAMBEZIA PROVINCES

PROJECT COMPLETION REPORT (PCR)

Public Disclosure Authorized

RDGS/AHWS

December 2017 Public Disclosure Authorized

PROJECT COMPLETION REPORT AFRICAN FOR PUBLIC SECTOR OPERATIONS (PCR) DEVELOPMENT BANK GROUP

I BASIC DATA

A Report data

Report date Date of report: November 30th 2017 Mission date (if field mission) From: November 26th 2017 To: 30th November 2017 Field district visit was done from 9th to 16th November 2017

B Responsible Bank staff

Positions At approval At completion Regional Director Frank BLACK Mrs Josephine NGURE Country Manager Alice HAMER Joseph RIBEIRO Sector Director Ali KIES Osward CHANDA Sector Manager Sering B. JALLOW Noel KULEMEKA Task Manager Boniface ALEOBUA Boniface ALEOBUA Alternate Task Manager - - PCR Team Leader Eskendir A DEMISSIE Mecuria ASSEFAW; Yolanda ARCELINA, PCR Team Members Boniface ALEOBUA and Pedro SIMONE

C Program data

Program name: National Rural Water Supply and Sanitation Program (PRONASAR) in Nampula and Zambezia Provinces Program code: P-MZ-E00-008 Instrument number(s): ADB 5800155000601 & ADF 2100150023298 Program type: GRANT & LOAN Sector: Water and Sanitation Country: Environmental categorization (1-3): 2 Processing milestones – Bank approved Key Events (Bank approved financing Disbursement and closing dates financing only (add/delete rows depending on only) (Bank approved financing only) the number of financing sources) Financing source/ instrument1: Financing source/ instrument1: Financing source/ instrument1: RWSSI TF Grant € 6,000,000 NA NA Cancelled amounts: Original disbursement deadline: Date approved: 09 November 2010 NA 31 December 2015 Original closing date: 31 December Date signed: 06 December 2010 Supplementary financing: UA0.0 2015 Revised (if applicable) disbursement Date of entry into force: Restructuring (specify date & amount deadline: 06 December 2010 involved): NA 30 September 2017

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Extensions (specify dates): Date effective for 1st disbursement: 06 Revised (if applicable) closing date: 31 December 2016, 30 June 2017 and December 2010 30 September 2017 30 September 2017 Date of actual 1st disbursement: 16 July 2012 Financing source/ instrument2: ADF Loan Financing source/ instrument2: Financing source/ instrument2: UA 5,270,000 NA NA Cancelled amounts: Original disbursement deadline: Date approved: 09 November 2010 NA 31 December 2015 Original closing date: 31 December Date signed: 06 December 2010 Supplementary financing: UA 0.0 2015 Date of entry into force: Restructuring (specify date & amount Revised (if applicable) disbursement 27 June 2011 involved): NA deadline: 30 September 2017 Extensions (specify dates): Date effective for 1st disbursement: : 02 Revised (if applicable) closing date: 31 December 2016, 30 June 2017 and February 2012 30 September 2017 30 September 2017 Date of actual 1st disbursement: 06 November 2013 Financing source/instrument (add/delete rows Disbursed amount Percentage Undisbursed Percentage depending on the number of financing sources): (amount, Euro/UA): disbursed (%): amount undisbursed (Euro/UA): (%): Financing source/ instrument1: € 5,745,066.71 95.75% € 254,933.29 4.25% RWSSI TF Grant Euro 6,000,000 Financing source/ instrument2: UA 5,040,324.34 95.64% UA 229,675.66 4.36% ADF Loan UA 5,270,000 Government: MZN51,811,728.00 MZN 23827509.75 46% MZN 27,984,218.25 54.00% Community: MZN37,240,000 MZN206,000,000 553% - - Other (eg. co-financiers). Add rows as needed NA NA NA NA NA TOTAL: UA 12,699,768 (Exchange PAR) UA1 12,483,921 98% UA2 768,576 6% Financing source/instrument (add/delete rows Committed amount Percentage Uncommitted Percentage depending on the number of financing sources): (UA): committed amount (UA): uncommitted (%): (%): Financing source/ instrument1: 5,967,667.62 99.5% 32,332.38 0.54% Financing source/ instrument2: 5,141,004.70 97.55% 128,995.30 2.45% Government: MZN 23,827,509.75 NA NA NA Other (eg. co-financiers). Add rows as needed. NA NA NA NA TOTAL NA NA NA NA Co-financiers and other external partners: NA Executing and implementing agency (ies): Covered taxes and running costs.

1 Exchange rate at PCR 2 Exchange rate at PCR 2

D Management review and comments

Report reviewed by Name Date reviewed Comments Country Manager Joseph RIBEIRO Sector Manager Noel KULUMEKA Regional Director (as chair of Country Josephine NGURE Team) Sector Director Osward CHANDA (OIC)

II Program performance assessment

A Relevance

1. Relevance of program development objective

Rating* Narrative assessment (max 250 words)

The program was prepared at the final stage of implementation of CSP 2006-2009, which had two pillars (Pillar 1 - Governance & Pillar 2 - infrastructure). The program was designed in line with the second objective of the pillar 2 which included increasing access to water and sanitation services. Then the program was mainly implemented during the CSP 2011 - 2015 period, under pillar 1 - Enhanced Private Sector Competitiveness Through Infrastructure Development, which included water and sanitation as one of its main objectives, and the national rural water supply and sanitation program (PRONASAR) expected outputs were reflected in the CSP 2011-2015. The program was also aligned with government objectives as expressed through its various planning instruments, including “ Second Poverty Reduction Strategy Paper 2006-2009” (under implementation at program preparation stage), which had water and sanitation as one of three objectives of the Human Capital Pillar; the Government Five-Year Program 2010- 2014 (program implementation period) had water and sanitation as its main objective under the Human and Social 4 Development Pillar, both designed to implement the vision of achieving MDG objectives of 69% and 48% coverage in rural water supply and rural sanitation, respectively by 2015.

The Bank-financed program supported a specific government national programme, PRONASAR, aimed at boosting services coverage and sustainability through coordinated implementation between the government and development partners. The Bank’s component of the Program was implemented in Nampula and Zambezia provinces; while other partners supported other program components and provinces. The provinces and their districts which received Bank’s support were at the bottom in terms of service coverage nationally and therefore it was a vehicle to narrow the uneven service coverage in the country. PRONASAR was the first sectoral program jointly implemented by the development partners in the water sector, and was conceptually designed by an AWF operation and the Bank supported technical assistance along with other partners through its inception phase.

* For all ratings in the PCR use the following scale: 4 (Highly satisfactory), 3 (Satisfactory), 2 (Unsatisfactory), 1 (Highly unsatisfactory)

2. Relevance of program design

Rating* Narrative assessment (max 250 words)

Program design was consistent in addressing the challenges faced by the rural communities and the institutions themselves, and during its implementation no major deviations to the initial design were observed. At PRONASAR design stage, government claimed rural water coverage was estimated at 54% and rural sanitation at 39%; although the actual figures were much lower as revealed at a later stage. Functioning water infrastructures were below 85% and about 40% of the government interventions were in rehabilitating existing infrastructures; and about 40% of sanitation infrastructures delivered by the communities requires further improvement to raise their standards. The program design included the 4 delivery of water infrastructures; awareness and education campaigns to foster construction of improved household sanitation infrastructures and management capability at decentralized government structures and community level, which were consistently delivered without major deviations during project implementation. Program design took into account government efforts of consolidating the decentralization process, which were consistently delivered without major deviations during project duration bringing the implementation of most of the activities to provincial level, and providing necessary institutional capacity development to provincial and district level through trainings and delivery of necessary equipment (water monitoring equipment, computers, vehicles and motorbikes). 3

While the program was designed to be implemented in a SWAP arrangement, the Bank supported it through parallel financing owing to the experience of previous Bank financing, unliquidated Special Account and concerns on fiduciary risks. The program also incorporated a range of technology options to be adopted in line with the conditions or particular circumstance of the areas and beneficiaries. It included water points, piped water systems, de-salination units and these were either powered by solar, grid electricity or diesel generator, There were minor challenges at implementation stage, specifically with regard to the design of Zambezia Small Piped Systems (SPS) water sources, which are showing limitation to supply water throughout the year (yields drops to nil during dry seasons) and the adoption of diesel generator for power supply to Riane SPS, , resulting in high operational costs, and leading to reduced daily supply time.

3. Lessons learned related to relevance

Key issues Lessons learned Target audience (max 5, add rows as needed) 1. Total alignment of the The alignment of the program with the government strategies, objectives, program implementation priorities and beneficiaries needs, allowed for delivery of almost all expected approach with outputs. The program also became the first true decentralized operation in the Government’s political sector, and it is inspiring the government to move a step further in other Government/Bank dispensation for programs funded by other partners. This approach should be maintained in empowerment of local future operations by combining investment with capacity building and decentralised institutions empowering local decentralised institutions 2. There appears to be too many components with The program components could have been defined around few objectives with Government/Bank apparent duplication in subcomponent objectives contributing to overarching objectives objectives

B Effectiveness

1. Progress towards the program’s development objective (program purpose)

Comments Provide a brief description of the Program (components) and the context in which it was designed and implemented. State the program development objective (usually the program purpose as set out in the RLF) and assess progress. Unanticipated outcomes should also be accounted for, as well as specific reference of gender equality in the program . The consistency of the assumptions that link the different levels of the results chain in the RLFshould also be considered. Indicative max length: 400 words. The program development objective was to increase sustainable access to water supply and sanitation. The Bank support was directed to two provinces (Nampula & Zambezia) and targeted districts and communities with low coverage (6 in Nampula and 5 in Zambezia) in support of the government objective of achieving MDG targets for rural water supply (69%) and for rural sanitation (48%). The Program was designed as a followed up from the technical assistance provided by the African Water Facility administered by the Bank to prepare a national rural water supply and sanitation program. The Bank championed the development of the PRONASAR and the Bank’s specific support was designed within this context. Program components included are: (i) Decentralized planning support: development of 2 provincial masterplans, 34 districts plans and support with equipment (water monitoring equipment, computers, vehicles and motorbikes) and technical staff; (ii) Capacity building: training of 90 government staff, training of 50 private sector staff and 30 NGOs staff; (iii) Rural water infrastructure: delivery of 570 new and rehabilitated wells and boreholes and 4 small piped systems; (iv) Rural sanitation: Hygiene and sanitation promotion in 34 districts, establishment of demonstration centers and local artisans in 34 districts and fostering the construction of 100,000 household latrines; (v) Technical assistance and consultancy: national and provincial level technical assistance to support program implementation which included: outsourced procurement services, outsourcing external monitoring and PAF, annual value for money audit, contract management consultancy, financial management consultancy, and procurement management consultancy; (vi) Testing alternative options: technology options and businesses packages, 200 latrines, supply chains, and management models; and 4

(vii) Program management: program management, annual audits, annual value for money audits. Almost all program components identified at appraisal stage and included in the program Grant and Loan agreements were implemented and some targets were exceeded. By the end of the program implementation, an additional 224,000 people got access to water supply services and additional 496,030 people got access to improved sanitation services. However, Mozambique did not meet the MDG’s target for Water Supply and Sanitation. The national access level as per Government of Mozambique (GoM) reports stands at 42.2% for rural water supply and 20.7% for sanitation by end of 2016. Access level in 2010 as per the JMP stood at 27% for rural water supply and 13% for rural sanitation.

2. Outcome reporting

Outcome Baseline Most recent End target Progress Narrative assessment Core indicators (as per value value (B) towards (indicative max length: 50 words per outcome) Sector RLF; add more rows as (Year) (A) (expected value target Indicator needed) at program (% realized) (Yes/No) completion) (A/B) Disaggregated data of people served by gender are not available, but according to 1997 census, women make up 52% of Mozambican population; and the target Outcome 1: was not totally achieved, because Additional people 300,000 estimated number of people served by a with access to safe 0 224,000 (50% 75% Yes water point was revised by the drinking water by women) government in 2011 from 500 to 300 per 2015 water point. However, in actual facts, more people use water systems or points depending on water availability in the area. A total of 99,206 latrines delivered by the Outcome 2: households as a result of education and Additional people 500,000 awareness campaigns undertaken by the with access to 0 496,030 (50% 99.2% Yes program serving a total population of improved sanitation women) 496,030 (with average 5 members per services by 2015 household). Outcome 3: 9 service providers were engaged to People sensitized deliver awareness and education with regard to campaigns along with the decentralised health and hygiene district institutions. Although, no education synthetized data have been found on 500,000 women participation. However from 0 495,000 (55% 99% interviews conducted in the field with Yes women) community members, women’s participation in the awareness program was substantial and higher than men and estimated at 75%. This is further evidenced by the high number of women in charge of water points. Outcome 4: Whole country figure from sector annual Ration of performance reports. There has not been a operational water consistent trend from 2010 to 2016 with facilities as % of 88.5% 85% 85% 100% intermittent higher and lower figures. In Partially total public number the targeted provinces the indicator had of water facilities mixed results, with Nampula - 92% and by 2015 Zambezia - 75%. Rating* (see IPR Narrative assessment methodology)

3 The project outcomes were very much summarized in four indicators in the Appraisal Report and the results are indicative of the substantial achievement of the targets in quantitative terms. The achievement for access to water 5

supply appears to be on the lower side with 75% but this was due to the change in the standard computation for people served per scheme. GoM lowered the number of people to be served from 500 to 300 per borehole powered by hand pump in 2011. From discussions with relevant stakeholders and field verification, three main aspects are currently affecting the major project outcomes. SPS are not fully fulfilling their intended objectives. Both the Zambezia SPSs are facing shortfall of water at the source in dry seasons leading to restrictions and suspension of supply and Riane (Nampula province) water supply system is most of the time inoperational, because the private operator could not cope with high operational cost due to diesel costs for running its system. Although the connection to the national grid is envisaged, the network has not yet reached the area. In order to sustain the results, the government will have to address these challenges either by increasing the SPS sources capacity through groundwater or by securing sustainable power supply to the Riane SPS. On sanitation, it was a huge improvement in terms of moving people from open defecation to using an improved sanitation. Households delivered basic latrines as per their context and environment and these require improvements over time. More continuous and sustained engagement of communities by the government is needed to move people up the sanitation ladder.

3. Output reporting

Output indicators Most recent End target (B) Progress Narrative assessment Core (as specified in the RLF; value (expected value at towards (indicative max length: 50 words per output) Sector add more rows as needed) (A) program target Indicator completion) (% realized) (Yes/No) (A/B) By the closing date (30 September 2017), 316 water points with hand pump were delivered in Output 1: New Nampula and 330 in Zambezia. Additional Water point sources 646 570 129% Yes infrastructures were possible due to reallocation delivered of the budget from shallow wells and favourable exchange rates at the end of the program. By the closing date (30 September 2017), 4 SPS were delivered, being 2 in Nampula province (Riane, Ribaue district and Lurio, ) Output 2: SPS and 2 in Zambezia province (Lioma, Gurue rehabilitated and 4 4 100% Yes district and Molumbo, Molumbo3 district). The extended program has also delivered additional 4 small desalinization systems (2 powered by solar) for boreholes in , Nampula province. Output 3: New Latrines delivered by households themselves as a household latrines 99,206 100,000 99.2% result of “communities' mobilization, hygiene Yes built by families and sanitation awareness campaigns”. Due to the methodology used (PEC-Zonal4) more Output 4: People 200,000 community members were covered, because it educated through 495,000 248% Yes (55% female) targeted the whole geographical area, instead of hygiene programs the specific beneficiary communities. Nampula - 493 and Zambezia - 395. More water Output 5: Water committees were established than the actual 600 Committees 888 148% number of water points delivered. Due to Zonal Yes (50% female) established Methodology” some already existing water points were also covered. 10 technical staff at provincial level (5 for each Output 6: People 189 140 province, 18 at district level (1 per district), and 135% Partially trained (50% female) (50% female) 36 from the staff Administrative Posts benefited from the trainings. In addition, artisanal trainings

3 Note that at project approval date, Molumbo was part of 4 PEC Zonal - Community mobilization through a geographical area 6

for 125 mechanics and spare parts suppliers were conducted. This output was assigned to be undertaken by Output 7: Districts 0 34 Districts 0% other PRONASAR component (common fund), No RWSS plans and it is still ongoing. Joint sector monitoring review government/development partners is being held Output 8: Annual since 2011. Although it did not directly fund this joint water sector 6 4 175% Yes activity, the Bank and the program actively review undertaken participated in all of them, and for 1 year the BANK was the sector coordinating partner. Rating* (see IPR Narrative assessment methodology)

Almost all expected outputs were delivered fully, and some of them exceeded the initial targets: water point sources - 129%; SPS - 100%, people mobilized - 248%; water committees established - 148%; The program made some savings from favourable exchange rates during the later stage of its implementation, which were utilized to deliver additional outputs, which included 30 water points per province, and 2 desalination micro- systems, some equipment for institutions capacity building and water sector gender strategy. 4 In order to avoid duplication, two program outputs activities were implemented by other development partners supporting other PRONASAR components: annual joint water sector review which was fully delivered, mainly funded by the World Bank Water and Sanitation Program and the common fund component of the program and the RWSS provincial masterplans and district plans, which are under preparation and funded by the common fund component. Although not directly financed, the Bank was directly involved in the planning and undertaking of the joint water and sanitation sector annual review of the program. It led and coordinated the sector for two consecutive years between 2014 and 2015. 4. Development Objective (DO) rating5

DO rating (derived from Narrative assessment (indicative max length: 250 words updated IPR)* Nearly all initial planned outputs were delivered. Almost all 660 water points delivered by the program are supplying water to the targeted rural communities (some 24 hours a day and others in average 7 - 8 hours a day, according to consumers agreed arrangements). The four SPS are partially supplying water to the respective villages with potential to full supply, once some challenges currently faced are resolved (water source and financially sustainable power supply). Although follow up is still required, most 3 targeted households are building sanitation infrastructures and are adopting improved hygiene behaviour. During the field verification it was noticed that communities are managing water point sources by themselves, the vast majority of them are female headed; and due to the capacity developed, decentralization is moving one step forward to district level in the two provinces with new decentralized operations already ongoing.

5. Beneficiaries (add rows as needed)

Actual (A) Planned (B) Progress towards target % of women Category (eg. farmers, students) (% realized) (A/B) In addition to domestic supply purpose, there was an effort, and according to government strategy, to 224,0006 300,000 75.0% 52% ensure that all schools and health centers have either a water point or a water connection. All schools and health centers, also in line with the government policy, have improved sanitation 496,0307 500,000 99.25 52% infrastructures in addition to households who delivered their infrastructures themselves.

5 For operations using the old supervision report and rating system in SAP, the DO rating for the PCR shall be calculated using the IPR methodology. 6 Water supply beneficiaries 7 Sanitation beneficiaries 7

6. Gender equity Description In the targeted communities the main issue was the risk faced by women and girls, who are responsible for fetching water in the specific case of rural Mozambique, in unreliable places such as rivers or streams, some of them located at distances of 1.5 to 3 km from respective homes. As for the vast majority of targeted communities, these were their first improved water infrastructures, the available water sources before program implementation were unimproved. In general, the program is generating positive impacts on the livelihood and wellbeing of the population of targeted communities in Nampula and Zambezia provinces, of which 52% are women, as clean water is available for drinking and hygiene purposes. During the community mobilization there was always an encouragement for women participation and women made up more than 50% of all water point community management committees established, and the program also delivered gender strategy for the sector.

7. Unanticipated or additional outcomes (add rows as needed) Description Type (eg. gender, climate Impact on change, social, other) program (High, Medium, Low) The program assisted the development of a gender strategy for the sector Gender Positive High The seasonality of the water sources (streams) is hampering the outcome of two SPS delivered in Zambezia province (Molumbo and Lioma) in Social and climate Negative Moderate dry seasons potentially worsen by impacts of climate change on change availability of water resources. Lack of availability of power supply at sustainable costs is affecting Social and Negative Moderate negatively the supply period of the Riane SPS (Nampula province). sustainability

8. Lessons learned related to effectiveness (add rows as needed) Key issues (max 5, add rows as needed) Lessons learned Target audience The lesson learned is that there is need for more due 1. Deficient analysis of the water sources is leading to diligence and investment in upfront study and deficient operation of Lioma and Molumbo SPS in dry Government investigation, including impacts of climate change seasons. and where appropriate, include mitigation measures. 2. The high diesel costs for power generator are leading The lesson learned is that in designing technical to minimum operation of the Riane SPS, in Nampula solutions, their sustainability, including financial Government province due to high operational costs being incurred to sustainability shall be carefully analysed. the operator.

C Efficiency

1. Timeliness Planned program duration – years Actual implementation time – years Ratio of planned and actual Rating (A) (as per PAR) (B) (from effectiveness for 1st disb.) implementation time (A/B) * 58 months (Mar 2011 (planned 68 months (From Feb 2012 (actual 0.85 3 effective) – Dec 2015) effective) - Sept 2017) Narrative assessment (indicative max length: 250 words) The initial implementation period was 61 months from the Grant and Loan signatures date (December 6th 2010) to the last disbursement date (31 December 2015). Although the Loan became effective for first disbursement on February 2nd 2012, the Grant was effective for disbursement from December 6th 2010, and resources could be used on across activities, regardless of the funding source; thus, the program was implemented in 81 Months period after 3 successive extensions. The main reason for delays were the 2015 floods which affected access roads to the implementation sites (both main and secondary roads were heavily affected) resulting in delays in drilling and civil works activities. Some delays at early stage were also reported mainly on establishment of the implementation team and proper understanding of the Bank procedures at provincial level.

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2. Resource use efficiency Median % physical implementation Commitment rate (%) (B) Ratio of the median percentage Rating of RLF outputs financed by all (See table 1.C – Total commitment rate of all physical implementation and * financiers) financiers (A) (see II.B.3) commitment rate (A/B) 128% 100% 1.28 4 Narrative assessment (indicative max length: 250 words) The initial proposed program outputs were (as per the program appraisal report): delivery of 570 water points, rehabilitation and expansion of 4 SPS, delivery of 100,000 household latrine, sensitization of 200,000 people through hygiene programs, establishment of 600 water and sanitation committees, training of 170 staff, preparation of 2 provincial masterplans and 34 district plans and delivery of 4 annual joint water sector reviews (JWSR). All outputs were delivered and some surpassed, except for provincial and district plans which are being undertaken with other partners support and JWSR were also funded by other partners. Almost all program resources were committed (99.5% of the Grant and 97.55% of the Loan), the government contributed operational costs and taxes. At PCR mission, the disbursement from Grant was at 95.75% and from the Loan at 95.64%. Within the remaining grace period for disbursement, Government will submit applications for an additional amount close to USD300,000 and this will raise the disbursement levels above 99%. 3. Cost benefit analysis

Economic Rate of Return Updated Economic Rate of Return Rating (at appraisal) (at completion) * 16% 19.17% 4 Narrative assessment (indicative max length: 250 words) The program has contributed to enhance water supply and sanitation coverage and improve service to the rural population in Nampula and Zambezia provinces in Mozambique by providing additional 660 water supply points and 4 small pipe systems, and encouraged the beneficiary communities to build about 99000 improved sanitation facilities. The program’s immediate impact are availing more quantity of safer water and a more convenient source of water to about 224,000 people, safer and more convenient excreta disposal and improved hygiene habits to about 496000 people in these two provinces. These benefits accrue to households, including women and children who spend an average of 3 hours per day fetching water and to children under five years whose health is particularly vulnerable to poor quality water supply and sanitation. The economic returns are measured in terms of the benefits accrued to beneficiaries in the form of increased access to improved quality of water supply, improved sanitation practices, time gained, a decline in water-borne diseases and a general improvement in living conditions. The program’s economic rate of return, which reflects its benefits, stands at 18%. The value is higher than the opportunity cost of capital of 12% and thus the program is considered economically viable. This rate is calculated based on investment, replacement and operating costs and estimates of program benefits represented by: incremental water and sanitation benefits of the program, social and economic benefit of alternative uses of time previously used for fetching water by households over a long distance, incremental health benefits from improved water supply and sanitation services. All costs and benefits are considered net of duties and taxes. In addition, the economic life of the investment is estimated at 20 years.

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4. Implementation Progress (IP)8

IP Rating Narrative comments (commenting specifically on those IP items that were rated Unsatisfactory or Highly (derived from Unsatisfactory, as per last IPR). (indicative max length: 500 words) updated IPR) *

The implementation progress was affected by two main factors: (I) the delays at the initial stage of program implementation (preparation for actual implementation), which included the fulfilment of conditions for Loan disbursement 18 months from the signature date (27 June 2011), and negotiations between the Executive Agencies (the National Directorate of Water) and Implementing Agencies (Nampula and Zambezia provincial governments). The actually implementation on the ground started in 2014 after delays in establishing the project teams at central and provincial levels and procurement for services’ providers; and (ii) the 2015 floods which interrupted road connections in the area constraining delivery of required equipment, materials and even free movement of people.

2 On the services providers’ side, some issues related to the knowledge of the country water resources availability context led one water points drilling contract to fail and the government had to cancel it, affecting negatively the targeted district (Rapale). The departure of the procurement and contract specialist who was supporting the Executing Agency in first semester of 2014 also affected implementation. The replacement was deployed only by October 1st 2015. In addition, there were delays during the initial phase with procurement process at all levels due to lack of adequate understanding of the processes and requirements. This was improved over time and in the extension period, the program managed to deliver all its intended outputs and most of its intended outcomes.

5. Lessons learned related to efficiency

Key issues (max 5, add rows as needed) Lessons learned Target audience 1. The program was implemented in 81 months against 61 months initially planned; among the reasons include It is important to ensure preparedness of involved issues of preparedness (negotiations for establishment of institutions upfront during project design and prior to Bank/GoM implementing units at provincial level were held during program approval to fast-track implementation and the course of the program implementation, resulting in avoid implementation delays. delays of actually implementation). 2. With multiple stakeholders involved at various levels, Refresher/repeated trainings on approach, fiduciary program implementation is challenging often resulting in and monitoring and evaluation is essential in the Bank/GoM delays of reporting and approach misunderstood. context of the program. Capacity development of the Executing and 3. Some issues of performance were derived from Implementing Agencies under the decentralisation unpreparedness to implement a program/project in Bank/GoM drive is needed. In the future, this shall include decentralized approach for the first time. district level.

D Sustainability

1. Financial sustainability

Rating Narrative assessment (indicative max length: 250 words) * For water point sources, instruments for community management were delivered by the program. Water management committees were established, including local artisans to support maintenance of infrastructures in a commercial agreement basis with the communities. In communities visited during field verifications, consumers are paying for water consumptions 3 (except some isolated cases), and part of the resources are used for maintenance of infrastructures. The amounts charged varies from community to community, being the most frequent “U$ 0.017/20 liters or U$0.25 - U$0.33 per month per family”. The most unfavourable price to the consumers is the payment per liters, which totals U$3.83 per households per month (30 liters per persons per day for 5 members in average per household), which is equivalent to 3.2% of two minimum

8 For operations using the old supervision report and rating system in SAP, the IP ratings need to be converted from the 0-3 scale used in SAP to the 1-4 scale used in the IPR. 10

wages in agriculture sector (the predominant sector in rural Mozambique, which is MZN 3,642.00 (U$60.7, for 2017), thus, below 5% two minimum wages. For SPS, private operators were engaged (in line with the government strategy) to operate on a commercial basis on the assumption of ensuring coverage of operational costs. During the field verification it was observed that on average the cubic meter tariff was set at MZN20.00 (U$0.33), and assuming 50 liters consumption per capita per day, monthly fixed tax of MZN 25.00 and government taxes of 75% against 17%, the average monthly household bill stands at MZN197.3 (U$3.3), which is also below 5% of two minimum agricultural wages. Except for Riane with diesel generator, operators reported to managing to cover operational costs so far. Financial sustainability of the program is ensured by requirement by the Government of Mozambique that the beneficiary communities to contribute (about 10%) of the water points either in cash or kind. In addition, the communities are also held responsible for operational and maintenance costs of the pumps and members contribute to keep funds to cover costs for regular maintenance of their water facility. This demonstrates communities’ ownership and application of the principle of beneficiary contribution to promote sustainability of service provision. This aspect has been supported by training and technical support to pump attendants and local artisans, which was provided as part of the program.

2. Institutional sustainability and strengthening of capacities

Rating Narrative assessment (indicative max length: 250 words) * The program included technical support at central and provincial levels to address identified challenges and knowledge transfer. It also provided training to government staff directly involved in monitoring and supervision and provided relevant required equipment to that end. As a result the two provinces are now taking more responsibilities with regard to program implementation with new operation financed by other partner already being fully implemented at provincial level and to be piloted in some districts starting in 2018. However, there is still a need to improve monitoring capacity, specifically in detecting in due time water points with major failures (requiring government intervention), and the specific monitoring required to SPS under private operation (at district and provincial level). At district level, the government managed to recruit, during the course of the project, at least one technical staff dedicated to 3 water issues. Artisanal trainings were provided and many of the technicians and suppliers are providing support to the various schemes in their areas. However, there is a need for close monitoring of the services to ensure that the capacity built is sustained and detect any deficiency at an early stage and intervene to avoid disruption of services. There is therefore need to put in place a strong monitoring mechanism and empower districts in the supervision or monitoring of private operations which are contracted out by provinces. In addition, traditional leaders were highly involved during project implementation (due to awareness component) and are overseeing the management of water sources and management of standpipes. Some of them were also trained. Further decentralization to district level (future operations) of activities such procurement of works will enhance the involvement of local communities and beneficiaries.

3. Ownership and sustainability of partnerships

Rating Narrative assessment (indicative max length: 250 words) *

During program implementation all relevant stakeholders were involved particularly the district governments, local and community leaders and beneficiaries themselves. Water points' construction was preceded by request from communities, which required them to show readiness, including the establishment of water source management team. In all water points visited during field verification it was noted that they have a management team, including one person responsible for payments collection. From interviews conducted during field verification it was also noticed that communities are taking care of infrastructures as their own, where some vandalism occur, they take necessary steps to protect the infrastructures.

4 Similarly, there is a high sense of ownership of infrastructures by the district authorities and local communities. During the field verification, the mission witnessed a community leader requesting water source for its community (which was not befitted by the program) and showing willingness of the community to contribute with free labour, where necessary. The beneficiary communities in the program areas were delegated and played as key agents at all stages of water supply and sanitation development. This has raised their consciousness about the benefits generated and the need to contribute towards the upkeep of the water points. This engagement and ownership by the beneficiaries has a major impact in promoting sustainability of the program activities. This is an element that has to be replicated in other similar operations in the country, or in the continent at large.

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4. Environmental and social sustainability Benefited Rating Narrative assessment (indicative max length: 250 words) *

The Program was classified as category 2 with regard to environmental impact, with minimal impacts on environment. The program activities are widely dispersed in the two provinces with localised small works. During operation there are no major environmental issues expected from water points due to limited volumes of water to be abstracted through hand pumps. The program delivered water points and ignited the construction of improved sanitation facilities by the households themselves contributing for environmental sustainability by creating conditions for increased hygiene, proper treatment and deposition of human waste and wastewaters generated by increased water consumption. 3 On social side, the availability of improved water sources (in most cases for the first time), closer to households and at affordable costs is having positive social impact on the beneficiary communities, benefiting the most disadvantaged and women and girls in particular, who are responsible for water provision at household level. The identified challenges are: (i) some households who are still resisting in using improved water, especially in the rainy season when water is available from streams and rivers; (ii) some households are also still resisting in adopting improved sanitation solutions, and those adopting are facing challenges to deliver good quality infrastructures; and (iii) some isolated cases of vandalism on infrastructures are also being observed. All of them have potential negative social and environmental impact, and should be addressed by continuing awareness campaigns and trainings to the communities.

5. Lessons learned related to sustainability

Key issues (max 5, add rows as needed) Lessons learned Target audience The clear strategy of managing water points through community structures (water committees) and SPS 1. There is a clear government strategy to ensure though private operator allowed for managing financial sustainability either for water points or for GoM structures to be in place immediately after the SPS. infrastructures delivery, contributing positively for sustainability. 2. There are still some challenges with regard to Long lasting behaviour change take time and requires a behaviour change and hence the need for continues continuous and systematic approach integrated with the GoM education and awareness through existing public government activities, not driven by programs only. institutions. There is need for community mobilisation through 3. Community awareness and education was carried adequate awareness and education at planning stage out by private service providers and there were followed by specific well designed community GoM deficiencies in terms of synchronisation with the engagement during and post implementation. The three various stages of the project. stages engagement should be well elaborated and synchronised with the program The monitoring process of SPS private operators’ 4. There are some challenges with regard to SPS performance needs to be strengthening and operators’ performance monitoring, with some local GoM consolidated, preferably operationalized at authorities not included in the process. decentralized level (District or Administrative post).

III Performance of stakeholders

1. Bank performance

Rating Narrative assessment by the Borrower on the Bank’s performance, as well as any other aspects of the program * (both quantitative and qualitative). See guidance note on issues to cover. (indicative max length: 250 words) The Bank supported program implementation from the Mozambique country office, with the respective task manager based in the country, supported by the regional office in South Africa and the Water and Sanitation Department at the Bank’s headquarters, Abidjan. The Bank provided guidance throughout the program implementation, resolving some challenges 3 faced, including the departure of the procurement and contract specialist from the Executive Agency, allocation of program savings for additional activities, an introduction of innovative solutions such as micro-desalination systems in Memba. However, program mid-term review was not carried out.

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Comments to be inserted by the Bank on its own performance (both quantitative and qualitative). See guidance note on issues to cover. (indicative max length: 250 words)

The Bank conducted 14 supervision missions (launching and PCR missions included) and six desktop supervisions during the course of the program implementation (in average 2 supervision missions per year) with team members comprising of the task manager, procurement, financial and social specialists, according to specific needs and issues of each mission. Each mission provided specific recommendations according to the implementation stage and challenges faced. The Mozambique country office provided regular support to the program through the task manager who was based in Mozambique and trough disbursement officer, procurement and social experts, also based in office. During the course of the program implementation, the Bank (task manager) was the chair of the Mozambique water sector development partners for a period of two years (2014 & 2015), leading actively the dialogue with the government. The Bank participated also actively in regular sector planning and performance review as well as other water and sanitation initiatives, enhancing Bank’s visibility and responding to emerging challenges and supporting the Government. Key issues (related to Bank performance, max 5, add rows as needed) Lessons learned For such support to a national program which included other development partners, the Bank’s closer engagement with 1. Bank proximity to the country for implementation executive and implementing agencies and other development enhancement. partners allowed for some quicker responses and adjustments to avoid duplications (for instance, some activities already being supported by other partners). PRONASAR was the first water program with decentralized implementation of almost all its major activities. In such case 2. Upfront implementation capacity development and trainings trainings, specifically those related to better understanding of Bank are necessary. rules and procedures should have been provided at very early stage of implementation to avoid challenges including refresher trainings at different stages.

2. Borrower performance

Rating Narrative assessment on the Borrower performance to be inserted by the Bank (both quantitative and qualitative, * depending on available information). See guidance note. (indicative max length: 250 words)

The performance of the borrower was generally satisfactory. Some challenges were faced at early stage of implementation due to lack of coordination with provincial governments and lack of understanding of Bank rules and procedures and challenges in commanding English (Bank’s official language). However, then the performance improved to allow the completion of all intended activities (should the program have not been affected by 2015 floods, it would have been completed in a shorter period of time). The borrower performance faced some challenges with regard to proper follow up of activities on the ground by all 3 institutions (central, provincial and local level) due to limited availability of government funds for this purpose. The program did not have any allocation for operational expenses as the Government was not allowed to open special account due to its failure to liquidate previous special account from the preceding Bank operation. Therefore, there was a limited monitoring of services’ providers works on the ground, specifically the community mobilization activities. On the financial performance, although Government contribution to the program was not defined at program design, the average Government disbursements stood below 50% (at 46%) of its annual budget allocated to support Bank-Funded PRONASAR component. However this was compensated by a greater community contribution towards the program. Key issues (related to Borrower performance, max 5, add rows as needed) Lessons learned Government initial preparedness was an issue, negotiations with 1. Despite the program having delivered all outputs, there were the provincial government to establish program implementation some delays at early stage of implementation due to issues of units should have undertaken prior to the program implementation borrower preparedness. kick off or approval. It could be carried out at design stage. When the program addresses the most important local needs will easily mobilize support among relevant local stakeholders (the 2. The engagement of district and local authorities in support targeted districts were the ones with lowest water supply and implementation was positive. sanitation coverages). The program proved a political dispensation that local institutions should be empowered.

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3. Performance of other stakeholders

Rating Narrative assessment on the performance of other stakeholders, including co-financiers, contractors and service * providers. See guidance note on issues to cover. (indicative max length: 250 words) Overall the performance of the other stakeholders, namely services providers was good. The infrastructures delivered are of good quality and are providing the intended services, except for some of the SPS, which requires some corrective measures from the government, and these are associated with the services providers’ performance. The major challenge with services providers’ performance was the Rapale drilling contract which the government end up terminating it due to successive unsuccessful drillings, which led the district to miss initial expected outputs.

One major issue reported by the local government and recognized by the provincial government was the performance of the community mobilization consultants and NGOs. Multiple reasons were reported from the deficiencies in the ToR (poor matching of expected results against the allocated budget) to deliberate mismatching between the proposal and the actual consultants’ implementation teams, resources allocated by the Consultants, and most importantly poor monitoring from the 3 client side.

Communities performed very well as demonstrated through their commitment and engagement in the project cycle. They have demonstrated high ownership of the schemes through collaboration at implementation including resolution of issues when they arise and protecting the assets. The water point management committees are functioning and people are making payments for services provided.

The performance of other partners financing the PRONASAR program was also very good. The collaboration, exchange of experience, technical assistance to emerging issues were features throughout the implementation of the Program. The two bi-annual reviews were good instruments to support the sector. The Bank funded program benefited from this support. Key issues (related to performance of Lessons learned (max 5) Target audience (for other stakeholders, max 5, add rows as lessons learned) needed) The specific local condition should be adequately described to inform 1. Drilling contract failing due to the the potential bidders the challenges and constraints in the area in order limited knowledge of the for them to factor it in their tender with adequate investment on upfront Mozambique context and the investigation. GoM Rapale water availability challenges by the overseas contractor engaged The contract provision that payment will only be paid for successful in that contract. boreholes protected the client as the risk was absorbed by the contractor A comprehensive review of the strategy adopted by the government for community mobilization (PEC Zonal) is required with clear objectives 2. Multiple challenges were pointed and activities for the various stages of the cycle (planning, out with regard to performance of implementation, post implementation, operation and maintenance). GoM mobilization campaigns services Building such capacity for community support within the public sector providers. at district level is essential for continued support beyond the life of projects.

IV Summary of key lessons learned and recommendations

1. Key lessons learned

Key issues (max 5, add rows as needed) Key lessons learned Target audience Rural water and sanitation programs are successfully implemented when the planning, implementation and 1.The program was the first to be implemented at post implementation support are provided at local and decentralised level and the sustenance of the policy was Bank/GoM decentralised level. The program proved that a condition for the program decentralised implementation is effective and improves local capacity. The technical solutions adopted need to take into 2. The SPS delivered by the program are partially account the existing limitations on the ground (in this fulfilling their objective of supplying water to the GoM case availability of water resources) and also financial targeted villages. sustainability of the infrastructures delivered. The key

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lesson is that there should be thorough investigation and analysis of sustainability upfront for such schemes It is important to ensure preparedness of involved 3. Program implementation faced some delays at early institutions upfront program approval to fast-tracking Bank/GoM stage of implementation due to inadequate preparedness. implementation and avoid delays. This shall include program staff training at early stage of implementation 4. There are still some challenges with regard to behavior There is a need for continued community mobilization change and infrastructures conservation which may affect GoM to ensure sustained behaviour change sustainability. Knowledge of local environment shall be a factor in 5. Some issues of performance of services providers were engaging services provider and on the other hand, observed during program implementation in both periodically assessment of implementation is required GoM consultancy and construction. in order to strengthen positive aspects and address potential challenges.

2. Key recommendations (with particular emphasis on ensuring sustainability of program benefits)

Key issue (max 10, add rows as needed) Key recommendation Responsible Deadline Consider augmentation of the water source capacity through groundwater sources, preceded by proper hydrogeological studies in order to address shortage 1. Address the issue of availability of water in dry seasons as well as interventions in enhancing GoM Immediately resources in both Zambezia small piped systems. catchment protection works to improve quantity and quality of water resources. Continuing monitoring of water resources is also needed to inform water supply programs. Stakeholders at all levels must be properly informed 2. Address the issue of power supply costs for the on the challenges faced; while seeking for alternative GoM Immediately Riane SPS. and more financial sustainable sources of power for the SPS. 3. The issues of quality of community Consider reviewing the community mobilization For future mobilization and in adequate synchronisation strategies with clear engagement objectives and GoM projects with implementation. activities for all cycles. 4. Behaviour changes take time beyond a project Ensure continues engagement with communities for life and Interruption in engagement with sustained outcome and consolidation of the result GoM Continuously communities could potentially redress the gains from the program. made For future operations capacity development upfront 5. Include capacity development in programs implementation is important, particularly at Future Bank/GoM design decentralized level (Provincial and Districts level) to projects enhance implementation

V Overall PCR rating

Dimensions and criteria Rating* DIMENSION A: RELEVANCE 4 Relevance of program development objective (II.A.1) 4 Relevance of program design (II.A.2) 4 DIMENSION B: EFFECTIVENESS 3 Development Objective (DO) (II.B.4) 3 DIMENSION C: EFFICIENCY 3 Timeliness (II.C.1) 3 Resource use efficiency (II.C.2) 4 Cost-benefit analysis (II.C.3) 4

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Implementation Progress (IP) (II.C.4) 3 DIMENSION D: SUSTAINABILITY 3 Financial sustainability (II.D.1) 3 Institutional sustainability and strengthening of capacities (II.D.2) 3 Ownership and sustainability of partnerships (II.D.3) 4 Environmental and social sustainability (II.D.4) 3 OVERALL PROGRAM COMPLETION RATING 3

VI Acronyms and abbreviations

Acronym (add rows as needed) Full name ADF African Development Fund ASNANI Nampula and Niassa Water and Sanitation Program (Portuguese abbreviation) CSP Country Strategy Partnership DO Development Objectives GoM Government of Mozambique GPS Global Positioning System IT Information Technology IP Implementation Progress JWSR Joint Water Sector Review MDG Millennium Development Goals MZN Metical (Mozambique Currency) NA Not Applicable NGO Non-Government Organization OIC Officer in Charge PRONASAR National Rural Water and Sanitation Programme (Portuguese abbreviation) RWSSI TF Rural water Supply and Sanitation Initiative Trust Fund SPS Small Piped System ToR Terms of Reference UA Units of Account U$ United States of America Dollar € Euro

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Annex 1: Economic Analysis

I. Economic and Financial Analysis The program has contributed to enhance water supply and sanitation coverage and improve service to the rural population in Nampula and Zambezia provinces in Mozambique by providing additional 660 water supply points and 4 small pipe systems; and motivated the beneficiary communities to build about 99000 improved sanitation facilities. The program’s immediate impact are availing more quantity of safer water and a more convenient source of water to about 224,000 people, safer and more convenient excreta disposal and improved hygiene habits to about 496000 people in these two provinces. These benefits accrue to households, including women and children who spend an average of 3 hours per day fetching water and to children under five years whose health is particularly vulnerable to poor quality water supply and sanitation. The economic returns are measured in terms of the benefits accrued to beneficiaries in the form of increased access to improved quality of water supply, improved sanitation practices, time gained, a decline in water-borne diseases and a general improvement in living conditions. The program’s economic rate of return, which reflects its benefits, stands at 19.2%. The value is higher than the opportunity cost of capital of 12% and thus the program is considered economically viable. This rate is calculated based on investment, replacement and operating costs and estimates of program benefits represented by: incremental water and sanitation benefits of the program, social and economic benefit of alternative uses of time previously used for fetching water by households over a long distance, incremental health benefits from improved water supply and sanitation services. All costs and benefits are considered net of duties and taxes. In addition, the economic life of the investment is estimated at 20 years. The economic analysis covers the program activities covering water supply and sanitation service delivery in Nampula nd Zambezia Provinces in Mozambique.

2. ASSUMPTIONS FOR COMPUTATION OF ECONOMIC RATE OF RETURN

i. Beneficiaries: A total population of approximately 224000 benefited from improved water supply services and 496000 population benefited with improved sanitation and hygiene practices. In this regard, it is also assumed that the beneficiary population is projected to increase by 2.3% annually. ii. Currency: The analysis has been done in Mozambique Meticals (MT). iii. Programme Economic Life: 20-year life span is assumed. iv. Investment Costs: These are actual costs of the program activities covering water supply and improved sanitation facilities in the two provinces in Mozambique. These costs include (a) initial cost, covering costs of water supply and improved sanitation facilities covered by DPs grants and loans, as well as GoM and beneficiaries contributions and (b) capital injections (10% of the initial investment) to cater for major replacement costs after 10 years normal operation. Thus in the years 2026, an estimated 10% of the total investment costs is accounted to provide for rehabilitation or major maintenance works of the facilities. The cost estimates are provided in the table below:

2012 2013 2014 2015 2016 2017 ADF UA - 4,235,264 2,470,743 1,438,432 1,008,146 49,749 RWSSI TF Euro 90,629 691,707 651,197 1,406,728 1,940,102 1,088,526 GOM MT 15,011,730 4,362,760 2,953,020 1,500,000

In MT ADF - 384,209,075 224,137,593 130,489,717 91,455,651 4,513,107 RWSSI TF 6,738,981 51,433,892 48,421,627 104,601,336 144,261,949 80,940,566 GOM - - 15,011,730 4,362,760 2,953,020 1,500,000 Total 6,738,981 435,642,968 287,570,950 239,453,813 238,670,620 86,953,673 Community Cont in MT 24,030,482 41,140,467 52,831,527 88,002,161 - 206,004,636 Total Cost in MT 6,738,981 459,673,450 328,711,416 292,285,340 326,672,780 86,953,673 17

v. Operation and Maintenance Costs: These are the incremental costs of operating and maintaining the facilities, including labour and other necessary maintenance inputs. These are estimated at 10% of the value of investment. vi. Health Benefits: Health related benefits considered in the analysis and the assumptions used to evaluate them are as follows: the potential increase in the cases of water borne diseases is projected with reference to the population without access to clean water and sanitation services. An estimated 30%9 reduction in disease incidence would accrue from improved water supply and sanitation services by virtue of increased quality, quantity, and regularity of water supply and sanitation services. These benefits reflect containing the cases of water and sanitation borne diseases and the savings in medical treatment costs. vii. Savings in water collection time: Willingness to pay for clean water is assumed to reflect the value of benefits to users, including the time saved when water is purchased from vendors. The total value of time to be saved as a result of the programme is therefore estimated as the consumer surplus accruing from the program. viii. Salvage Value: Most of the program facilities would have almost reached the end of their economic live, such that the salvage values would be negligible and would not make an impact on the evaluation of the program’s EIRR. As a conservative measure for the computation of the IRR, no residual value has been considered at the end of the program’s life span.

9 This figure is based on the 1991 WHO report “Effects of improved water supply and sanitation on ascariasis, diarrhea, hookworm infections, schhistosomisais and trachoma” 18

Economic Value Health Year Inv Cost O&M Cost Total Cost Total Ben Net of Time Savings Benefits 2012 6,738,981 673,898 7,412,879 - (7,412,879) 2013 459,673,450 46,641,243 506,314,693 16,228,060 - 16,228,060 (490,086,633) 2014 328,711,416 79,512,385 408,223,801 41,673,942 16,121,455 57,795,397 (350,428,404) 2015 292,285,340 108,740,919 401,026,259 89,194,337 46,006,128 135,200,465 (265,825,794) 2016 326,672,780 141,408,197 468,080,977 222,858,250 134,107,759 356,966,009 (111,114,969) 2017 86,953,673 150,103,564 237,057,237 324,907,411 209,482,637 534,390,048 297,332,811 2018 153,105,635 153,105,635 324,907,411 209,482,637 534,390,048 381,284,413 2019 156,167,748 156,167,748 324,907,411 209,482,637 534,390,048 378,222,300 2020 159,291,103 159,291,103 324,907,411 209,482,637 534,390,048 375,098,945 2021 162,476,925 162,476,925 324,907,411 209,482,637 534,390,048 371,913,123 2022 165,726,464 165,726,464 324,907,411 209,482,637 534,390,048 368,663,585 2023 169,040,993 169,040,993 324,907,411 209,482,637 534,390,048 365,349,055 2024 172,421,813 172,421,813 324,907,411 209,482,637 534,390,048 361,968,235 2025 175,870,249 175,870,249 324,907,411 209,482,637 534,390,048 358,519,799 2026 150,103,564 179,387,654 329,491,218 324,907,411 209,482,637 534,390,048 204,898,830 2027 182,975,407 182,975,407 324,907,411 209,482,637 534,390,048 351,414,641 2028 186,634,915 186,634,915 324,907,411 209,482,637 534,390,048 347,755,133 2029 190,367,613 190,367,613 324,907,411 209,482,637 534,390,048 344,022,435 2030 194,174,966 194,174,966 324,907,411 209,482,637 534,390,048 340,215,082 2031 198,058,465 198,058,465 324,907,411 209,482,637 534,390,048 336,331,583 2032 202,019,634 202,019,634 324,907,411 209,482,637 534,390,048 332,370,414 2033 206,060,027 206,060,027 324,907,411 209,482,637 534,390,048 328,330,021 2034 210,181,228 210,181,228 324,907,411 209,482,637 534,390,048 324,208,821 2035 214,384,852 214,384,852 324,907,411 209,482,637 534,390,048 320,005,196 2016 218,672,549 218,672,549 324,907,411 209,482,637 534,390,048 315,717,499

EIRR 19.17% NPV 594,209,825

Sensitivity Analysis -20% Ben EIRR 12.95% Sensitivity Analysis +20 O&M Costs EIRR 16.89%

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Annex 2 : Resource Utilisation

Planned Expenditure Utilised at PCR undisbursed Source in Various Currencies In UA PAR Exchange in Various Currencies In UA Nov 2017 Exchange Rate Various CurrenciesIn UA Nov 2017 Exchange Rate RWSSI Euro 6,000,000.00 4979253.112 5,745,066.71 4,747,989.02 254,933.29 210,688.67 ADF, UA 5,270,000.00 5,270,000.00 5,040,324.34 5,040,324.34 229,675.66 229,675.66 GoV, MZN 51,811,728.00 1,425,749.26 23,827,509.75 279,468.80 27,984,218.25 328,222.12 Comm, MZN 37,240,000.00 1,024,766.10 206,000,000.00 2,416,138.87

Total 12,699,768.47 12,483,921.02 768,586.45

Utilisation Performance: 98% Undisbursed balance: 6%

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